The 10 Countries That Spend the Most per Person on Beer
Beer: It's what's for breakfast, lunch, and dinner for college students on spring and summer break! It's also quite the staple in a number of countries around the world.
According to statistics portal Statista, global beer production has increased from 1.3 billion hectoliters in 1998 to 1.95 billion hectoliters in 2012, a 50% boost. Generally speaking, as the global population grows, and as life expectancies improve, the opportunity to throw back a cold one increases as well, possibly boding well for a number of global brewers.
A diverse group of beer drinkers
But just as no two beers taste the same (trust me, as a beer snob I can attest to this), the demographic makeup of beer drinkers in each country can be vastly different. In some regions drinking alcoholic beverages in any form is frowned upon or flat-out prohibited. A number of Middle Eastern countries restrict alcohol sales to hotels, or those with private residential licenses. In Saudi Arabia, for instance, alcohol is completely banned!
However, in other regions of the world beer is more than just a drink -- it's a part of the culture. Go to Germany during its 16-day Oktoberfest festival and tell me the locals and the breweries represented don't exude their own unique "beer culture."
The point being that breweries can use beer-consumption data to their advantage if they know which countries to focus on. Luckily, FinancesOnline.com has done the hard work for us and combed through copious amounts of data to unearth the 10 countries that spend the most on beer per person.
Understanding which countries' citizens are more apt to spend their hard-earned money on beer could cue investors in to regions where global brewers plan to focus moving forward. It can also give us insight as to where future acquisitions are most likely to occur.
10 countries that spend the most annually, per person, on beer
Without further ado, and courtesy of FinancesOnline.com, here are the countries:
Some initial thoughts that might come to mind include:
- "Why is Germany only 10th?"
- "Woohoo, we're No. 7!" And...
- "What the heck, Australia?"
Germany may have a pervasive beer culture, but it seems the other nations on this list actually spend more money on beer per person.
Age demographics can play an important role here. For instance, the median age of Irish inhabitants is a full 11 years younger than those in Germany. Since beer is often less costly than wine and spirits, it's the preferred drink of young adults that don't have as much disposable cash to throw around. In other words, a younger population should equate to more money spent per person on beer and helps explain why Ireland spends roughly three times as much per person on beer than Germany on an annual basis.
A seventh-place showing for the U.S. at $356.20 per person is great news for the ongoing craft beer revolution. Last month I offered my growing concern that the rapid expansion of the brewing scene in the U.S. could kill the nostalgia behind craft brewing and drown out the uniqueness of up-and-coming breweries. Over the past 35 years the number of breweries in the U.S. has grown at a compounded annual rate of 10%. At this pace we'll have more than 6,500 breweries in operation by 2025 -- a staggering figure considering there were less than 100 in operation just 35 years ago.
Specifically, high levels of per capita spending in the U.S. are what continue to fuel Boston Beer , the company behind Samuel Adams, and Craft Brew Alliance , the parent of Widmer Brothers, Redhook, and Kona.
In the first quarter, Boston Beer recorded an incredible 35% increase in revenue to $183.8 million amid a 32% boost in core shipment growth. And not only is revenue rising, but Boston Beer was able to pass along an average price increase of 2% during the quarter. If beer drinkers have proven anything, it's that they're willing to pay a premium for craft beers, which are perceived to be more full-flavored.
The story was similar for Craft Brew Alliance, which recorded a 20% increase in net sales for the first quarter and a 17% jump in total beer shipments. Similar to Boston Beer, improved and expanded production capacity helped contribute in a big way to its improved results and signals Americans' willingness to throw back craft beer.
Down under, but on top
Surprisingly, as DrinksTrade.com in Australia noted a few years ago, premium beer sales, the push toward craft beer, and population growth have been the driving forces pushing the Australian brewing industry upward.
However, what really appears to be pushing Australia to the top of the heap when it comes to per capita consumption are its high beer prices. According to FinancesOnline.com, Australia's beer prices rank as the eighth highest in the world, at $4.45 per half-liter bottle of domestic beer. High taxes on alcohol are mostly to blame and require Aussies to open their wallet especially wide when buying a beer. Don't get me wrong; on a per-person consumption basis, Australia ranks second in the world, ahead of Germany, Ireland, and the U.S., to name a few countries. But the high costs of importing and taxing beer bumps annual per-person spending up to nearly $748!
International opportunity awaits
With ample opportunities in overseas markets based on the data compiled by FinancesOnline, I'd suggest additional international expansion and consolidation could be on the horizon.
We already saw a sizable deal conducted in 2011 with SABMiller purchasing Foster's, the company behind VB, Crown, and Carlton Draught, for $10.2 billion. Considering how robust and steady consumption figures are in Australia, it's no surprise that SABMiller wanted to latch on to this growing market.
Prior to that, in 2010, Heineken announced a deal to purchase FEMSA for roughly $7.7 billion in order to boost its presence in Latin America. Although just Venezuela appears among the highest-spending countries per capita, Latin America and South America represent two rapidly growing regions that could be immune to a global slowdown among industrialized nations.
Who could be next? Don't forget about China! FinancesOnline notes that China breweries hold the first, second, and fourth best-selling beers around the world by barrel volume. An international brewer looking to make a quick impact to its bottom line may want to consider a company like Tsingtao Brewery , which sold 58 million barrels of Tsingtao beer in 2012. Considering that rapid GDP growth is boosting Chinese middle-class beer consumption and that ample potential to boost pricing exists, since China is among the cheapest countries to buy beer, I'd surmise that Tsingtao could be a great buy for the right price.
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The article The 10 Countries That Spend the Most per Person on Beer originally appeared on Fool.com.Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of, and recommends Boston Beer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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